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Issues: Whether a complaint under Section 138 of the Negotiable Instruments Act, 1881 is maintainable when the statutory demand notice calls upon the drawer to pay an amount exceeding the cheque amount without specifying the basis for the excess demand.
Analysis: The statutory scheme under Section 138, particularly proviso (b), requires a demand notice for the "said amount of money", meaning the cheque amount. The notice must therefore clearly demand the amount covered by the dishonoured cheque, though ancillary claims such as interest or costs may not invalidate the notice if they are severable and the principal amount is correctly identified. Where the principal demand exceeds the cheque amount and the notice does not explain the excess, the notice fails to comply with the statutory requirement. The Court applied this principle to the admitted facts that the notice demanded Rs. 2 crores against a cheque of Rs. 1 crore and did not state any basis for the higher demand. The plea of typographical error was not accepted as curing the defect for purposes of criminal liability under Section 138, which must be strictly construed.
Conclusion: The demand notice was defective and did not satisfy proviso (b) to Section 138 of the Negotiable Instruments Act, 1881; consequently, the complaint was not maintainable and the petitioner was entitled to quashing of the proceedings.